Today’s speech by the Governor before the Massachusetts Municipal Association was largely a very good one based on some very good plans. Kudos to the Governor. Let’s start with the Great, and, yes, there is also Bad.
• The idea of requiring “each community to move all of your retirees to Medicare coverage and give you the option of extending your pension schedules within fiscally responsible parameters” is great.
• The push to regionale “municipal services and other reforms around procurement and contract advertising” is great, but we have seen few details on the tools and incentives the state wants to provide. Pioneer’s own Steve Poftak was also at the MMA, presenting our recent study of obstacles and lessons learned from previous attempts at regionalization. This is a great conversation, but let’s get to details.
• Not cutting education spending is good (though the rest of local services are kind of taking on the chin). That said he is limiting cuts to additional assistance and lottery funding below where Pioneer’s proposal got (he proposes cutting $128 million, we thought we had to get as high as $200 million). Let’s see the rest of that plan, Guv!
• His GIC proposal is a step in the right direction. We may want to go further faster. We believe the opportunity for more is there, but this is a good opening salvo (from the Guv’s speech):
That doesn’t mean you have to join the GIC; if you can do better in a joint purchasing group or MIIA, so be it. To assist you in achieving these savings, we will lower the requirement for union approval of entry into GIC or an equivalent group to 50 percent. If municipalities and their unions cannot meet or exceed the GIC standard within a reasonable period of time, our legislation will reduce future local aid payments proportionately.
He puts his point very nicely:
The point is blunt, but necessary: we must all get on with the business of finding savings.
• The increases in local (telephone poles, telecom switching stations, and meals and hotels tax) and state (one-penny statewide increase in the meals and hotels tax) we should discuss. We have not been convinced on the telecom issue, and additional taxes during a recession usually act as disincentives to economic activity.
Here’s a thought on how to make one of the taxes (the local meals tax increase), uhm, palatable. Communities that adopt a streamlined permitting process and reduce the absurd regulations to a state standard will be allowed to apply a local meals tax for as long as they hold to that standard. That might make sense because it would lower costs to businesses that could possibly compensate for the cost of the tax. Just trying to be helpful…